The plan includes the following features and benefits: n Reviewable and guaranteed premium rates n...
The plan includes the following features and benefits:
n Reviewable and guaranteed premium rates
n Termination ages between 50 and 65, or the plan can be written for a specific number of years
n The term-based plan can terminate prior to age 50
n Guaranteed insurability options (GIOs) on the occurrence of specified events
n Automatic indexation in line with retail price index (RPI)
n Choice of indexation during claim
n Proportionate benefit
n Waiver of premium
n Career break option
n Cover while not in paid occupation
Minimum acceptable monthly premium £pm: £5
Minimum acceptable annual premium £pa: £50
Maximum age attained at entry: 59 (60 next birthday)
Maximum annual benefit available £pa: £125,000
Minimum policy term: Five years
Termination age:
Available as a term-based contract or a set date between age 50 and 65.
Option for benefits to be paid for a limited period:
Not available
Decrease term after start date:
There is an option to decrease the term. All changes can only be made at the anniversary date.
Increase benefit subject to underwriting:
Increases in cover are done by setting up a separate, additional income protection (IP) plan. The premium for the additional plan will be based on the client's age, health and required level of cover at the time the new plan is set up. All changes can only be made at the anniversary date.
Decrease benefit subject to underwriting:
The plan benefit can be reduced on its anniversary, if required.
GIOs:
The GIO allows increases in cover of up to 50% of the original benefit, up to a maximum of £8,000 a year.
The events are as follows:
n Mortgage increase associated with house moving or home improvements
n Marriage
n Childbirth or adoption
n Salary increase following a significant promotion or achievement of a professional qualification
Maximum age to exercise a GIO: 54
Plan available without indexation:
The plan is automatically indexed in line with RPI on each policy anniversary. The client can decline the increase, in which case no further increases will be offered without underwriting.
Benefit amount increased by a fixed percentage:
Under the 'escalation of benefit option', the client has the choice at outset to have the benefits during payment increase in line with RPI, or at a fixed rate of 5% a year.
Guaranteed premium rates available: Yes
Reviewable premium rates: Yes
Number of years to first premium review:
The reviewable rates can change at any time.
Career Break available:
Premiums can be waived for up to 12 months following redundancy or for a career break.
Maximum housepersons benefit:
The maximum payable will be the benefit under the policy before the option was exercised.
Relapse benefit available:
Relapse benefit is available within 12 months of the original incapacity.
Relapse period:
The relapse period for linked claims is 12 months.
Hospitalisation benefit available: Not available
Disability counsellors used:
Claimants have access to vocational rehabilitation consultants.
Maximum percentage of income insurable: 50%
Limitation of benefit:
Benefit is limited to the combined value of:
n Any benefit payable under this policy,
n Benefit paid under any other sickness or accident policies in respect of insured (other than policies where the maximum period of benefit is not more than two years),
n Any regular income which the insured receives in respect of any trade, profession or vocation,
n Any retirement received by reason of incapacity benefit is limited to 50% of pre-incapacity earnings, taking into account the combined value of the income sources noted above.
The maximum benefit cover is restricted to £125,000.
P11D benefits included in benefit calculation:
P11D benefits can be included in the income calculation.
Earnings:
Taxable annual earnings for the employed: gross earnings for assessment purposes (including benefits in kind) in the 12 months before incapacity.
State benefits deducted from benefit amount: No
Notification of a change in occupation required: Yes
Own occupation definition of disability:
The default definition of disability is 'own occupation'.
Definition of illness or injury:
The life insured is unable to carry out the material and substantial duties of their occupation because of illness or injury.
Material and substantial duties:
The duties which are normally required for the performance of
the life insured's occupation and which cannot be reasonably omitted or modified.
Any occupation definition of disability: Not available
Any suited definition of disability: Available
Special definition:
Incapacity will be defined as when Standard Life determines that, due to illness or injury, the life insured is incapable of performing the material and substantial duties of their occupation or any other occupation for which they are reasonably suited by training, education or experience.
Definition of disability linked to being confined to home:
Not available
Deferred period:
The period is selected by the policyholder and can be four, eight, 13, 26 or 52 weeks.
Two deferred periods in one plan: No
Number of occupation classes: Four
Review underwriting terms:
An alteration could be made to the contract if a client changes occupation, or changed from a smoker to a non-smoker. Each case would be considered on its individual merits.
Smoking: Smoking rates available
Free cover during underwriting: No
Insurer pays for medical evidence:
The insurer pays for medical evidence at outset and for medical examinations requested at point of claim.
Claim notification period:
The claim notification period varies, according to the length of the deferred period.
Number of exclusions applying to the plan:
There are three exclusions, namely pregnancy, infection with HIV/Aids and carrying out an act of terrorism.Analyst's commentThe first day of Advent saw Standard Life relaunch its income protection plan. In a product area that is generally devoid of development it is great to see a major provider showing renewed appetite for this market.
The rejuvenated plan offers a choice between reviewable or guaranteed premium rates and can be arranged to either a set maximum age or for a specific term. The latter option allows cover to run alongside a mortgage. This facility will make it a practical alternative to mortgage payment protection insurance.
A good range of deferred period options are also offered. Event-based guaranteed insurability, waiver of premium benefit and indexation options are all automatically included. The plan also includes linked claims cover. This means that, in the event of a further period of incapacity from the same cause occurring within 12 months, benefits will be paid immediately.
In the event of unemployment or temporary career break, cover can be suspended for up to 12 months. For longer breaks the plan provides benefit based on an amended definition of disability for a commensurate reduction in premium for up to five years.
The plan has three exclusions; HIV/Aids (in certain circumstances), normal pregnancy and, unusually, terrorism, defined as incapacity resulting from carrying out any act of terrorism. Incompetent Al Qaeda operatives need not apply.
Nick Telfer, head of life and protection, Defaqto
